Divine investing 12-18-98

Jeff Clabaugh

} Divine investing?

By Jeff Clabaugh, CBS MarketWatch Last Update:

If God invested in the markets, which stocks would He buy? Wal-Mart (WMT)
WMT, -0.56%
? The Gap (GPS)
GPS, -2.19%
?Fannie Mae (FNM)
FNM, +7.06%
? Those stocks all show up in some of the "religious" funds out there. These are funds that are endorsed by, organized by or otherwise supported by various religious groups and faiths. Religious funds started showing up early this decade, and there are now more than 30 of them available.

In a Money.com feature called "Investing on Faith," you can see what the funds are, who has put them together and in which stocks they're investing. Among them are funds geared toward Lutherans, like those run by the Aid Association for Lutherans. These funds ban "sin stocks" and donate a portion of management fees to charity. AALCapital Growth (AALGX)
AALGX, +0.12%
, with a three-year return of 21 percent, holds stakes in GE(GE)
GE, +1.07%
, Microsoft(MSFT)
MSFT, +1.28%
and Walgreen's (WAG)
wag
.

And many offer tithing plans that allow investors to transfer dividends to charity. The MMAPraxis Growth Fund(MMPGX)
mmpgx
has holdings in Fannie Mae (FNM)
FNM, +7.06%
and Hewlett-Packard (HWP)
hwp
. For conservative Christians, there is the Timothy Fund (TPLNX)
TPLNX, +1.53%
, which screens out companies that donate to Planned Parenthood or offer domestic-partner benefits. It holds shares of Danaher (DHR)
DHR, +0.23%
and Doral Financial (DORL)
dorl
and has a three-year return of 11 percent. Money.com also lists funds aimed at Christian Scientists and Muslims and links to other stories about the benefits and pitfalls of investing with your religion in mind. See full story.

Fundy business

With more than 5,200 mutual funds available to American investors, it's no wonder some of us have trouble making up our minds. Maybe you should consider getting several funds for the price of one. "Fund funds" have a growing following. The Armchair Millionaire's "Ask the Expert" column features comments about so-called fund funds from IBCFinancial Data's managing editor, Peter Crane, who calls them one of the fastest-growing segments of the fund industry, because they give investors a single, conservative and easy-to-use diversified fund choice. Crane says you could mimic a fund fund by buying shares in each of those funds yourself, but funds of funds make reinvestment and maintenance of an account much simpler. He says fund funds are good for beginning investors who can only afford one fund. The big disadvantage, he writes, is that the "one size fits all" strategy isn't right for every investor. The Schwab MarketTrack All-Equity Portfolio (SWEGX)
SWEGX, +0.53%
, Vanguard's LifeStrategy Funds (VSCGX
VSCGX, +0.00%
, VASIX)
VASIX, -0.07%
and T. Rowe Price's Spectrum line of funds (PRSGX
PRSGX, +0.31%
, RPSIX
RPSIX, -0.08%
, PSILX)
PSILX, +0.08%
are among those on The Armchair Millionaire's list. More on this recommendation.

Cheap chips

Looking for some blue chips to put on your plate? Investools.com's "Daily Advisory" quotes conservative investor Geraldine Weiss' special report on the top values among blue-chip firms. Weiss saysgold is at a 30-year low, and it makes sense to add at least one gold stock to your holdings. She picks Barrick Gold (ABX)
ABX, -2.26%
. Also in her top 10 is Arnold Industries (AIND)
aind
, a trucking and warehousing firm that's suffered from strikes and driver shortages. But Weiss likes its future earnings prospects. The price-fixing scandal that hit Archer Daniels Midland (ADM)
ADM, +0.79%
is yesterday's news, says Weiss, so the damage done to its stock price makes it a top blue-chip value. And she predicts The Limited(LTD)
LTD, +6.84%
, which is closing underperforming stores, "is ready to dazzle Wall Street." Weiss also picks two utilities as best blue-chip values: Central South West (CSR)
CSR, -25.00%
and Hawaiian Electric (HE)
HE, -0.06%
. And she likes what she sees in Wallace Computer (WCS)
wcs
. The company makes business forms, labels and office products, and Weiss is attracted to its low proce-to-earnings ratio of 13 and its very low debt. More on this recommendation.

Out with the old, in with the new

Folks have been saying for years that the Dow no longer fairly represents the growth of American business. But its short list of 30 stocks always manages to prove a good gauge in the end anyway. Until now. David Wilson's "Wilson Financial Report," posted on Investorama.com's site, says this year is different. The Dow represents the old, he says. The Nasdaq index represents the new. And the contrast between the two has never been more obvious. Dow components Coca-Cola (KO)
KO, +2.90%
, Boeing (BA)
BA, +0.60%
, Procter &Gamble (PG)
PG, +0.61%
, Sears (S)
S, -1.77%
, Johnson &Johnson (JNJ)
JNJ, +0.86%
, Union Carbide (UK)
uk
, Merck (MRK)
MRK, +2.11%
and J.P.Morgan (JPM)
JPM, -0.56%
have all warned that earnings will miss the mark this quarter. Nasdaq heavyweights like Oracle (ORCL)
ORCL, +0.20%
, Dell(DELL)
dell
, Intel (INTC)
INTC, +0.07%
, Cisco Systems (CSCO)
CSCO, -0.01%
and Microsoft (MSFT)
MSFT, +1.28%
have all either pre-announced or delivered better-than-expected earnings. The Dow represents retailing with Wal-Mart (WMT)
WMT, -0.56%
, the Nasdaq with Amazon.com (AMZN)
AMZN, +0.01%
. Dow manufacturing stocks are companies like General Motors (GM)
GM, +1.69%
and Goodyear (GT)
GT, +0.75%
, while they're software companies and computer makers on the Nasdaq. Which companies are better poised to take advantage of the future?The Nasdaq, says Wilson, is the better way to track our new economy. See full Story.

Prudential's pundits

What's Prudential Securities telling its investors to expect next year?Prudential's "Weekly Investor Review" gives some of its investment stars a soapbox, and chief investment strategist Greg Smith warns we're heading for more head spinning in 1999. He predicts a second wave of Asian trouble and is forecasting a recession for the U.S.manufacturing sector. Robert Rountree, Prudential-Bache Securities' Hong Kong portfolio strategist, agrees. He thinks Asian economies will contract by 1 percent on average next year. China looks good to Prudential economist Pan Ming, who sees 7 to 8 percent growth for China's economy next year. Chief Economist Richard Rippe sees slower expansion here at home in 1999 but finds comfort in the cushion we have in the Fed's willingness to take action. And Ralph Acampora, Prudential's director of technical research, calls 1999 "the year of the stock picker." Acampora says investors need to be more aggressive with secondary issues next year. More on this recommendation.

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